Japanese companies trimmed capital investment in the first quarter, a result that likely indicates revised data due next week will continue to show the economy contracted in the period.
Capital expenditures on goods excluding software fell 0.5% in the three months through March from the previous quarter following a surge in spending at the end of last year, the Finance Ministry reported Monday. Manufacturers led the decline, cutting spending by 3% from the prior quarter, while service-sector firms boosted spending a tad. From a year earlier, overall outlays rose a weaker-than-expected 6.8%.
The fall in outlays came despite continued strength in corporate earnings. Profits jumped 15.1% from a year earlier, almost double the consensus estimate, and marking the fifth quarter of gains. Sales advanced by 2.3%.